The Value of Preference Information in Agency Relationships

Standard models of agency theory assume that the principal has considerable information about the preferences of the agent. Once this assumption is relaxed, the question arises whether the principal should try to obtain additional information about the agent's preferences. In this paper we introduce the concept of a Value of Preference Information (VPI), which describes the benefits to the principal from obtaining additional information about the agent's preferences. We show analytically that the VPI is non-negative and that the VPI will not decrease when the principal's information structure is refined. Computational methods are used to study factors influencing the VPI. The results of these experiments show a strong relationship between the entropy of the principal's information structure and the VPI. It is thus possible to evaluate an information structure independently of the decision problem delegated to the agent

A framework for the selection of the right nuclear power plant

Civil nuclear reactors are used for the production of electrical energy. In the nuclear industry vendors propose several nuclear reactor designs with a size from 35–45 MWe up to 1600–1700 MWe. The choice of the right design is a multidimensional problem since a utility has to include not only financial factors as levelised cost of electricity (LCOE) and internal rate of return (IRR), but also the so called “external factors” like the required spinning reserve, the impact on local industry and the social acceptability. Therefore it is necessary to balance advantages and disadvantages of each design during the entire life cycle of the plant, usually 40–60 years. In the scientific literature there are several techniques for solving this multidimensional problem. Unfortunately it does not seem possible to apply these methodologies as they are, since the problem is too complex and it is difficult to provide consistent and trustworthy expert judgments. This paper fills the gap, proposing a two-step framework to choosing the best nuclear reactor at the pre-feasibility study phase. The paper shows in detail how to use the methodology, comparing the choice of a small-medium reactor (SMR) with a large reactor (LR), characterised, according to the International Atomic Energy Agency (2006), by an electrical output respectively lower and higher than 700 MWe

Integrating multiple criteria decision analysis in participatory forest planning

Forest planning in a participatory context often involves multiple stakeholders with conflicting interests. A promising approach for handling these complex situations is to integrate participatory planning and multiple criteria decision analysis (MCDA). The objective of this paper is to analyze strengths and weaknesses of such an integrated approach, focusing on how the use of MCDA has influenced the participatory process. The paper outlines a model for a participatory MCDA process with five steps: stakeholder analysis, structuring of the decision problem, generation of alternatives, elicitation of preferences, and ranking of alternatives. This model was applied in a case study of a planning process for the urban forest in Lycksele, Sweden. In interviews with stakeholders, criteria for four different social groups were identified. Stakeholders also identified specific areas important to them and explained what activities the areas were used for and the forest management they wished for there. Existing forest data were combined with information from interviews to create a map in which the urban forest was divided into zones of different management classes. Three alternative strategic forest plans were produced based on the zonal map. The stakeholders stated their preferences individually by the Analytic Hierarchy Process in inquiry forms and a ranking of alternatives and consistency ratios were determined for each stakeholder. Rankings of alternatives were aggregated; first, for each social group using the arithmetic mean, and then an overall aggregated ranking was calculated from the group rankings using the weighted arithmetic mean. The participatory MCDA process in Lycksele is assessed against five social goals: incorporating public values into decisions, improving the substantive quality of decisions, resolving conflict among competing interests, building trust in institutions, and educating and informing the public. The results and assessment of the case study support the integration of participatory planning and MCDA as a viable option for handling complex forest-management situations. Key issues related to the MCDA methodology that need to be explored further were identified: 1) The handling of place-specific criteria, 2) development of alternatives, 3) the aggregation of individual preferences into a common preference, and 4) application and evaluation of the integrated approach in real case studies

Fiscal policy instruments and the political economy of designing programs to reach the poorest:

Poverty reduction, Hunger, Pro-poor policies, Government policy, Safety nets, information for development planning,

Nuclear emergency decision support : a behavioural OR perspective

Operational researchers, risk and decision analysts need consider many behavioural issues. Despite many OR applications in nuclear emergency decision support, the literature has not paid sufficient attention to behavioural matters. In working on designing decision support processes for nuclear emergency management, we have encountered many behavioural issues. In this paper we synthesise the findings in the literature with our experience and identify a number of behavioural challenges to nuclear emergency decision support. In addition to challenges in model-building and interaction, we pay attention to a behavioural issue that is often neglected: the analysis itself and the communication of its implications may have behavioural consequences. We introduce proposals to address these challenges. First, we propose the use of models relying on incomplete preference information, outlining a framework and illustrating it with data from a previous decision analysis for the Chernobyl Project. Moreover, we reflect on the responsibility that rests on the analyst in addressing behavioural issues sensitively in order to lessen the effects on public stress. In doing so we make a distinction between System 1 Societal Deliberation and System 2 Societal Deliberation and discuss how this can help structure societal deliberation in the context of nuclear emergencies

An Integrated Assessment Framework for Water Resources Management: A DSS Tool and a Pilot Study Application

Decision making for the management of water resources is a complex and difficult task. This is due to the complex socio-economic system that involves a large number of interest groups pursuing multiple and conflicting objectives, within an often intricate legislative framework. Several Decision Support Systems have been developed but very few have indeed proved to be effective and truly operational. MULINO (Multisectoral, Integrated and Operational Decision Support System for Sustainable Use of Water Resources at the Catchment Scale) is a project funded under the Fifth Framework Programme of the European Research and the key action line dedicated to operational management schemes and decision support system for sustainable use of water resources. The MULINO DSS (mDSS) integrates hydrological models with multi-criteria decision methods and adopts the DPSIR (Driving Force – Pressure – State – Impact – Response) framework developed by the European Environment Agency. The DPSIR was converted from a static reporting scheme into a dynamic framework for integrated assessment modelling (IAM) and multi-criteria evaluation procedures. This paper presents the methodological framework and the intermediate results of the mDSS tool through its application in a pilot study area located in the Watershed of the Lagoon of Venice.Integrated water resources management, Spatial decision-making, Decision support system, Catchment, Environmental modelling